Sunday, October 28, 2012

Switzerland, Italy Ban Novartis Flu Vaccines

Switzerland's health regulator imposed an immediate ban on Novartis AG's NOVN.VX +0.09% flu vaccines Thursday after possibly contaminated flu shots were found in batches in Italy, in a further embarrassment for the Swiss drug maker, which has struggled with a raft of manufacturing problems recently.

Medical watchdog Swissmedic halted deliveries of up to 160,000 doses to doctors and pharmacies as a precaution following a similar move by Italian authorities. The ban comes at an awkward time shortly before the flu season starts. There is already a shortage of flu vaccines in Switzerland and Italy this year after Netherlands-based vaccine maker Crucell, a unit of American drug maker Johnson & Johnson, JNJ -0.34% had suspended a delivery of seasonal flu vaccine across Europe last week.

In Austria, health authorities said they've issued a recommendation to doctors and pharmacies to switch to other flu vaccines than the Novartis products.

Novartis said the Italian health ministry had acted after the company itself reported the presence of small particles in the vaccines.

Problems with its flu vaccines represent a new blow for the Swiss drug maker, which has struggled with a series of manufacturing problems recently. The Basel-based company is still trying to resume production at its troubled facility in Lincoln, Nebraska, which was shut down in December because of manufacturing flaws, and recently had to recall a birth-control pill because of a packaging error.

Novartis Chief Executive Joe Jimenez in a call with journalists sought to reassure that its flu shots are safe, adding that the company is cooperating with health authorities.

"We are confident that the safety of the vaccines is assured. The lot in question had a deviation, it has been identified and put on hold and has not been released to the market," he said. "The manufacturing of vaccines is a complex procedure. Italian authorities are free to continue investigating," but there is evidence that such deviations wouldn't affect safety or efficacy, Mr. Jimenez said.

Novartis produces a big chunk of its flu vaccines in Italy, from where they are shipped to Europe and parts of Asia. Mr. Jimenez said he didn't expect more countries to ban the vaccines, even though he couldn't rule it out. Vaccines for the U.S. market are produced in Liverpool, England, and aren't affected, Novartis said.

Italian and Swiss authorities have advised doctors and nurses not to use the flu shots after small white particles were spotted in the syringes. Swissmedic said that it is possible that some of the ordinary components of the vaccines had clumped together. Novartis said these particles are proteins, which are normal and necessary components of flu vaccines.

"It is now Novartis's task to find out what is wrong and which batches are concerned," Swissmedic spokesman Daniel Lüthi said, a process that may be complicated because of the high number of doses potentially affected. "We have to wait until they can give us new results and more evidence." If the products are found to be contaminated they have to be destroyed by the manufacturer, Mr. Lüthi said.

Italy had ordered 3 million doses from Novartis, but it wasn't immediately clear how many of those had already been delivered to date.

The ban could create further embarrassment to the company, even though contamination issues are an industrywide problem, analysts say.

"Injectable drugs are very difficult to produce, and the risk of contamination is higher in liquids than it is in solids, such as tablets. It can affect not only vaccines but also cancer therapies, even though flu vaccines are much closer to consumers than chemotherapy drugs, so that's an additional reputation problem for Novartis," said Birgit Kulhoff, who manages a health care portfolio for private bank Rahn & Bodmer in Zurich.

The U.S. Food and Drug Administration last year sent a warning letter to Novartis's generics unit, Sandoz, saying the unit had failed to correct repeated manufacturing violations in the U.S. Over the past few years, other pharmaceutical companies, including Johnson & Johnson and Sanofi have been warned over manufacturing issues at their plants.

Also in Italy, authorities last week started an investigation into alleged widespread corruption at Sandoz, whose representatives in the country are suspected of allegedly offering perks including trips and cash to 67 doctors, including pediatricians, to increase the number of their drugs prescriptions.

Mr. Jimenez declined to comment on the Italian investigation regarding Sandoz because it is still under way. "If there's any issue within Novartis regarding compliance and marketing practices we would act immediately," he said, without elaborating.